News - Audi
Audi eyes 10 per cent profit growth in 2016
Growing family: Despite the diesel crisis, Audi managed to profit in 2015 and is setting higher targets for 2016, driven by new models such as the Q2, which made its debut in Geneva.
EV investment, Mexico factory, expanding global team to fuel continued Audi growth
7 March 2016
AFTER a challenging year overshadowed by the Volkswagen Group diesel emissions
crisis, Audi is to bounce-back in 2016, with 20 new or updated models, an
expanding global presence and an even greater focus on electric vehicles
predicted to boost operating return by up to 10 per cent.
Despite the diesel scandal which only financially impacted the company in the
case of V6 diesel engines, Audi still managed to close out 2015 with revenue of
€58bn ($A86b) and an operating profit of more than €4.8bn ($A7.1b).
That figure represents an operating return on sales of 8.3 per cent, while
overall global unit sales hit a new record high for the the company with
1,803,246 Audis finding homes around the globe – an increase of 3.6 per cent.
With a view to the future, the German car-maker says it will plough $A4.4b of
that profit back into emerging technologies such as electrification and digital
innovation, following in the tracks of vehicles such as the R8 e-tron, which
introduced production electric power and the TT which pioneered the company's
More vehicles are also expected to join Audi's plug-in hybrid stable that was
initiated by the A3 e-tron hatchback and Q7 e-tron large SUV.
Twenty new or updated models will be welcomed in 2016, including the Q2 – the
latest addition to the Q-family – and a fizzy diesel SQ7 version of the Q7 to
sit alongside the smaller SQ5.
In the 2015 financial report, Audi explains that its growth strategy is partly
dependent on fresh new models as well as increased support and supply from
production and development infrastructure.
In Germany, 1200 new “experts” will be appointed to “strengthen core
competencies” while a new generation of Audi employees will be nurtured through
an apprenticeship program that will accept 10 per cent more candidates.
Loyal employees will be rewarded by a collective bargaining agreement, which
shares company profits with staff who have remained with Audi for a set period
of employment. Audi predicts a figure of around €5420 ($A8000) for eligible
Audi anticipates a “moderate increase” in sales worldwide, but warns that the
significant investment of cash for both research and development and the diesel
“matter” will negatively impact company earnings in the early part of the year,
but net-year profit will emerge in the strategic target corridor of 8.0 per
cent to 10 per cent.
Greater global demand will in-part be met by the new factory in Mexico, but as
well as building the Q5 mid-sized SUV, 3800 jobs will also be filled by
residents in the San Jose Chiapa region by the time the facility opens. That
figure could climb as high as 20,000 in time, taking into account all
opportunities created by supporting businesses in the area.
The unfolding diesel emissions scandal that emerged last year is not over yet
for the company, but compared with its parent Volkswagen Group, Audi has a more
manageable task. As part of an agreement, Audi will take responsibility for
impacted V6 engines, while VW has the more sizable challenge of resolving
excessive nitrogen oxide emissions for four-cylinder units.
Audi categorises costs relating to the crisis as a “special item” which, in
2015 dragged the operating return on sales percentage from 8.8 down to 8.3 per
“We regret what happened,” said Audi AG board of management chairman Rupert
Stadler. “We will ensure full transparency and assure you that we will put
The company is now more than half way through its Strategy 2020 plan, which
aims to elevate the company to the number-one brand in the premium segment
The milestone marker of 1.5 million units by the end of 2015 was convincingly
eclipsed, and Audi is confident it is on target to hit the two million total by
the end of 2020.